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Leases for residential property
must be put in writing. The tenancy agreement must include the
following essential terms and conditions:
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1. Who the lessor and tenant
are ...
The name and address of the tenant, and the agent (if there is
one) or the lessor.
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2. Rent: How much rent is
to be paid and at what intervals ...
Rent can be paid by:
- cash or cheque;
- bank deposit to an account specified by the lessor/agent;
- electronic fund transfer including credit cards;
- payroll deductions (or pension deduction);
- a method agreed to by both parties.
Rent accrues on a daily basis while the tenant occupies the
premises, or holds the premises after termination.
Penalty for late payments
are also stated clearly.
Rent in advance ...
Most lessors/agents require tenants to pay their rent, usually
fortnightly or monthly, in advance. Tenants will normally pay
the first lot of rent before they move in. Rent in advance is
not part of the rental bond.
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Tenants must pay their rent on time and at a place stated in
the tenancy agreement.
If no place is stated, then rent must
be paid at an appropriate place.
If, after signing the
agreement, the lessor/agent changes the location, and it is a
reasonable place, the tenant must pay at this location while
the written notice is in force.
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3. Rental bond ...
A rental bond is money paid by the tenant, usually to a lessor/agent,
at the start of a tenancy as a security against the tenant
breaching the terms of the tenancy agreement.
In the event of any damages done by the tenant, the lessor/agent
may use this bond to effect the necessary repairs.
At the end of the tenancy, the bond must be refunded to the
tenant if there is no damage to the property and the rent
payment is up to date.
Service charges ...
The lessor
has to pay for:
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any costs to set up the tenancy agreement and
ensure that the property is in good condition;
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rates and insurance for the property (i.e.
insurance for the building, not for the tenants belongings).
Tenants normally pay expenses or service charges for
facilities such as electricity, gas, or telephone.
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Usually, a rental bond equivalent to four weeks’ rent is
collected.
If the
premises are not separately metered, the tenant may be
charged for items only if they are specified in the tenancy
agreement, showing the method of calculating the tenant’s
share and how this is to be paid.
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4. Term of tenancy ...
The dates when the agreement starts and ends (for
fixed term leases ), or the agreement is periodic (for
periodic leases ),
must be state clearly.
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5. Rights of renewal ...
A lease agreement will usually give an initial lease term
(say, two years) and then give the tenant one or more rights
of renewal (e.g. additional two terms of one year each). That
means that at the end of the initial two-year term, the tenant
can, if he so wish, renew the lease for a further period of
one year. This would give the tenant the right to occupy the
property for a total of four years.
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Note that
rights of renewal cut only one way - it is the tenant’s choice
whether to renew or not.
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6. Rent review periods ...
A lease agreement will state the periods at which the rent
will be reviewed. Usually this will be every two or three
years.
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It is in the
lessor’s interests, as the property’s owner, to have rent
reviews as often as possible. This is particularly important in
a market in which there is strong rental growth.
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7. Maximum number of people ...
The lessor can and should state in the lease agreement the
maximum number of people who may live in the premise, taking
into account the size and layout of the dwelling. This does
not include short-term visitors.
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Stating the
maximum number of occupiers has the effect of limiting the
number of people living in the property long term.
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8. Assignment/Sub-leasing ...
The lessor may have a provision in the lease with the tenant
whereby the tenant can assign the lease or sub-let to somebody
else.
Assignment means the original tenant remains bound by the
lease. Any assignment or sub-leasing will require the lessor’s
permission, but the lessor cannot unreasonably withhold it.
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It is to the
lessor’s benefit to preclude any sub-leasing or assignment.
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9. Maintenance ...
Landlords are responsible for 'fair wear and tear'.
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As rented properties need to be 'fit to live in', any urgent
repairs - such as a leaky roof, or any fault or failure of the
gas, electricity or water supply - must be carried out by a
qualified tradesperson as soon as reasonably possible.
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10. Inspections and repairs ...
A reasonable/acceptable period of notice, in compliance with
the local legislation, must be given to the tenant if the
owner wants to enter his premises to inspect it or carry out
repairs. The amount of notice needed depends on the reason for
entering the premises.
Generally, the minimum notice periods are:
- to inspect the premises - 7 days (limit of one
inspection in a three-month period)
- to do routine repairs or carry out maintenance - 24
hours
- to repair or carry out maintenance where the premises is
in a remote area and there is a shortage of qualified
tradespersons in the area - no notice
- in an emergency, or to protect the premises from damage
- no notice
- if the lessor/agent believe that the premises are
abandoned - 24 hours
- to show the premises to a prospective
tenant or purchaser or for valuation purposes - 24 hours
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The parties may
wish to negotiate a time that is suitable to everyone. However,
if entry is for a lawful purpose, the correct notice has been
given, and the entry is at a reasonable time, the tenant cannot
refuse entry.
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11. Inventories ...
(See Inventory List for
details.)
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12. Other standard terms ...
Details about what the tenant and the lessor/agent can and
can't do such as the keeping of pets, etc.
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13. Any other special terms ...
Special terms in the agreement must not conflict with the
standard terms or the law.
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14. Disputes ...
Disputes between the lessor and tenant can be managed by
mediation, arbitration, or as stipulated by the local
legislation.
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